Last week November 2013 soybeans (CBOT:SX13) opened at $12.72¾ and closed at $13.28.Over the past week, and especially yesterday with the weekend weather forecast, the large moves up in price are being caused by hot, dry weather over much of the grain belt. Soybeans at this time are much more vulnerable than corn, as corn has already passed its pollination stage. Soybeans are still podding and adding beans to the pods. The hot, dry weather has the potential to affect crop yields. And these are the types of fears that move grains in the midst of “weather markets.”

And looking at the USDA’s Crop Progress-Soybean Condition report, which is below, we will want to watch for increases to Very Poor, and Poor, which we saw this past week now with Very Poor at 3% Poor at 10%. This will help gauge if in fact yields may be affected. Of course actual yields will not be known until harvest. So if you lie in the grain belt like I do here in Chicago, enjoy the heat, stay cool and have a prosperous trading week.

We see in the Disaggregated COT last week Producers as well as Managed Money made solid bull moves. Producers went from a net short position of -102,559 contracts to -154,339 contracts net short. Managed Money went from 59,530 contracts net long to 101,995 contracts net long. If this continues week to week, I have no doubt we will see soybeans head to $15 and maybe even retest $16, which we saw hit the first week of July when big money was in the middle of a bullish posture.

If you need help understanding how to understand how to use the NEW COT report to your benefit get instant access to my new e-book "What Lies Beneath ALL Trends". It is filled with eye opening information.Commercial Net Tracker instructions: This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.

Proceed to Page 3 for this week's detailed fundementals...

Technicals

On the daily chart in technicals we see a strong trend established with ADX at 49.5. MACD is bullish once again adding divergence from above the signal line and Stocahstics are in deep overbought territory, which I am not concerned about with ADX where it is at. Big question now is will we see a correction down before harvest? Maybe the weekly chart can help.

Click to enlarge.

Have a prosperous trading week.

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